Abstract

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 introduced provisions prohibiting health insurance plans from offering benefit packages that include financial requirements or treatment limitations for mental health and substance use disorder services that are more restrictive than those applied to medical/surgical benefits.

Purpose of health policy or idea

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was passed as part of the Emergency Economic Stabilization Act of 2008 (H.R. 1424). The purpose of this
Act was to amend previous legislation in order to require that, beginning in late 2009, any health insurance plan that covers both medical and surgical benefits and mental health or substance use
disorder benefits cannot include financial requirements (such as copayments and cost sharing) or treatment limitations (such as number of visits or days covered) for mental health and/or substance
use disorder services that are more restrictive than those applied to medical and surgical benefits covered by the plan. The purpose of the legislation is to improve patient access to mental health
and substance abuse treatment services by reducing the financial barriers to access to care.

This legislation is a component of a larger movement in the United States towards 'mental health parity'. In this case, 'parity' refers to the idea that mental health and substance use disorder
services ought to receive the same coverage under health insurance plans as medical and surgical benefits. This is important, because prior to the enactment of the Wellstone-Domenici Act,
private insurers had the freedom to impose greater cost sharing requirements and to limit the mental health and substance use disorder services offered in their benefit packages.

This legislation will impact all businesses with 50 or more employees that offer group health insurance, including those businesses that have self-funded health insurance plans regulated under the
Employee Retirement Income Security Act (ERISA). The inclusion of self-funded plans is critical, because they make up a significant portion of the market and are exempt from existing state-level
parity laws.

It is important to note that this legislation does not require insurers to cover mental health and substance use disorder services generally, nor does it require that specific mental health
services be covered. The requirements apply only to plans that already offer mental health and substance use disorder services, and only impact cost sharing and treatment limitations for services
that are covered.

Senators Paul Wellstone and Pete Domenici - the original sponsors of the more limited mental health parity bill that passed in 1996 - worked together for years to pass legislation for parity in
mental health and substance use disorder services. Paul Wellstone passed away in a plane crash in 2002, but the Act was named for both senators, in honour of their efforts in this area.

Main points

Main objectives

The main objective of the Wellstone-Domenici Act is to improve access to mental health and substance use disorder services by reducing financial barriers to access to care.

Political and economic background

Prior to the passage of the 2008 legislation, insurers had the freedom to impose greater cost sharing requirements and to limit the mental health and substance use disorder services offered in
their benefit packages. Research has suggested that utilization of mental health services is significantly more responsive to cost sharing than is utilization of other medical services.

For years policy makers have sought to improve parity in the coverage of mental health and substance use disorder services. The Wellstone-Domenici Act marks the most recent effort to address
parity by addressing the financial barriers to access.

Change based on an overall national health policy statement

The Wellstone-Domenici Act represents a bipartisan effort to improve parity in mental health and substance use disorder treatment.

Purpose and process analysis

Current Process Stages

Idea

Pilot

Policy Paper

Legislation

Implementation

Evaluation

Change

Implemented in this survey?

Origins of health policy idea

For several decades advocates have argued for equal insurance coverage of mental health and substance use disorder treatment as compared with other illnesses. In 1996, 'partial parity' legislation
was enacted that prohibited health insurance plans from setting annual or lifetime spending limits on mental health services that were lower than the limits set for the medical/surgical services
covered. However, as a consequence of this legislation, many health insurance companies - in an effort to reduce costs - also opted to raise co-payments and set limitations on the number of
outpatient visits and inpatient hospital days covered for mental health and substance use disorder services.

In the 12 years that followed, several unsuccessful attempts were made to enact legislation that would guarantee full parity. The Wellstone-Domenici Act's passage might be seen as the result of a
number of more subtle changes over time that contributed to this greater shift in national policy. These changes include: an increased recognition of the availability of effective treatment for many
mental illnesses, recognition that mental illness and substance use disorders affect employee productivity, increased prevalence of managed behavioral health care (MBHC) capabilities which have
helped to control costs and, perhaps most importantly, evidence from states and the Federal Employees Health Benefit (FEHB) program that mental health parity does not substantially increase
costs.

Initiators of idea/main actors

Providers: Providers are generally supportive of the legislation which should improve access to care.

Payers: Insurance company support is mixed: the overall industry opinion (expressed by AHIP) is supportive, but many individual insurance companies cite administrative challenges and increased costs as reasons to be opposed.

Patients, Consumers: Patients/consumers employed in companies with >50 employees are likely be supportive as this legislation would result in reduced out-of-pocket costs for services.

Private Sector or Industry: The private sector is generally concerned about the incremental costs of this policy. However, while the legislation may increase the costs of providing insurance for their employees, it is also recognized that it may improve employee productivity.

Others

Approach of idea

The approach of the idea is described as:amended: Arguments for full parity for mental health and substance use disorder services have been made for decades. This legislation represents an attempt to address some of the limitations of legislation passed in 1996 that partially addressed the parity issue.

Innovation or pilot project

Else - Parity laws (of varying levels of comprehensiveness) already exist in the majority of states and as part of the Federal Employees Health Benefit (FEHB) program.

Stakeholder positions

This legislation received widespread support/acceptance from nearly all stakeholders including firms with greater than 50 employees, their employees, providers and the insurance industry. Although
America's Health Insurance Plans, the national organization that represents the health insurance industry, expressed support for the legislation, the position of individual insurance companies is
somewhat more mixed. This is largely due to the complexities associated with the implementation of the legislation, particularly the administrative complexities relating to the alignment of mental
health and substance use disorder benefits with those for medical and surgical services. They were also concerned with the incremental costs associated with the implementation of this legislation.
Determining equivalency of services, and potential issues associated with "carve-out" behavioral health benefits, have been cited as the key challenges associated with implementation.

Actors and positions

Description of actors and their positions

Providers

Physicians, hospitals and other providers

very supportive

strongly opposed

Payers

America's Health Insurance Plans (AHIP)

very supportive

strongly opposed

Individual insurance companies

very supportive

strongly opposed

Patients, Consumers

Patients, Consumers

very supportive

strongly opposed

Private Sector or Industry

Employers

very supportive

strongly opposed

Others

Celebrities

very supportive

strongly opposed

Influences in policy making and legislation

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was passed as part of the Emergency Economic Stabilization Act of 2008 (H.R. 1424). Different versions of
the legislation were passed with bipartisan support by both the US House of Representatives and the US Senate by September of 2008. The final bill was signed by President Bush in October of 2008.

Legislative outcome

success

Actors and influence

Description of actors and their influence

Providers

Physicians, hospitals and other providers

very strong

none

Payers

America's Health Insurance Plans (AHIP)

very strong

none

Individual insurance companies

very strong

none

Patients, Consumers

Patients, Consumers

very strong

none

Private Sector or Industry

Employers

very strong

none

Others

Celebrities

very strong

none

Positions and Influences at a glance

Adoption and implementation

Health insurance companies will be most directly involved in (and affected by) the implementation of the Wellstone-Domenici Act. Individual insurance companies will be responsible for the
alignment of mental health and substance use disorder benefits with those for medical and surgical services and for developing processes for determining equivalency of services.

One key challenge associated with implementation relates to the potential issues associated with carve-out behvioral health benefits. "Carve-outs"are behavioral health benefits that employers
purchase seperately from medical benefits. In some cases, employers may have one "carve-out' vendor and several plans providing medical benefits. In such a case, the "carve-out" vendor would have to
ensure equivalency of their benefits with those benefits in each of the health plans offered by the employer.

Monitoring and evaluation

No mechanism to regularly monitor and evaluate the implementation of the Wellstone-Dominici Act was included in the legislation itself.

Results of evaluation

Expected outcome

The reduction of financial barriers to access to mental health and substance abuse treatment services will potentially result in increased utilization of these services and improved treatment
outcomes for those affected.

An increase in the utilization of mental health and substance use disorder services would likely result in an increase in costs, both for employers and for employees, as health insurance companies
increase overall health insurance premiums to compensate for the increased expenditures on their end. The Congressional Budget Office projected that the legislation would result in an increase in
premiums of between 0.2-0.4 percent.

The most significant undesirable effect of the legislation would be the abandonment of mental health and substance use disorder treatment benefits by employers. Because the legislation only
applies to health insurance plans that cover both medical/surgical benefits and mental health or substance use disorder benefits, there is potential for employers to eliminate coverage of all mental
health and substance use disorder benefits.

Impact of this policy

Quality of Health Care Services

marginal

fundamental

Level of Equity

system less equitable

system more equitable

Cost Efficiency

very low

very high

The Wellstone-Domenici Act will have a modest impact on the utilization of mental health and substance use disorder services.